- Optimism surrounding China-U.S. trade talks lift kiwi on Tuesday.
- US Dollar Index fails to hold on to recovery gains, returns to mid-95s.
- NZ GDT Price Index declines 3.6%.
The NZD/USD pair rose to its highest level since August 9 at 0.6680 in the last hour as the US dollar failed to hold on to its recovery gains. At the moment, the pair is trading at 0.6675, adding 0.7% on the day.
Latest comments from Chinese officials suggest that China is going into the trade talks, which is scheduled to take place later this week in Washington, with the expectation of reaching an agreement with the United States helped trade-sensitive currencies such as the NZD and the AUD on Tuesday.
Furthermore, regardless of a few intra-day recovery attempts, the greenback is still feeling the bearish pressure that became apparent following US President Trump’s comments on the Fed’s tightening strategy. After turning flat on the day near 95.70 earlier in the session, the US Dollar Index lost its traction and was last seen down 0.25% on the day at 94.50.
On the other hand, the outcome of the bi-weekly GDT auction in New Zealand showed that the GDT price index declined 3.6% after staying unchanged in the previous auction to make it tough for the pair to rise toward the 0.67 mark.
There won’t be any other macroeconomic data releases in the remainder of the day, and the greenback’s performance is likely to continue to impact the pair’s movements.
Technical levels to consider
The pair could face the initial resistance at 0.6690/0.6700 (Aug. 9 high/psychological level) ahead of 0.6740 (50-DMA) and 0.6850 (100-DMA). On the downside, supports are located at 0.6635 (daily low), 0.6545 (Aug. 15 low) and 0.6500 (psychological level).
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